Crude Oil Prices Suppress by Moving Averages, Sensitive to Inventory and OPEC News
Oil prices took a bearish turn during Thursday’s Asian session, as U.S. WTI crude oil fell over 0.4% to hit a three-day low of $76.18 per barrel. The drop came after a previous rise and ultimately resulted in a lower closing. The main factor behind the decline is the double suppression of the 100-day moving average and the 200-day moving average on the chart level. Additionally, concerns about U.S. demand were triggered by data showing a significant increase in U.S. crude oil inventories, well above analyst expectations.
Brent crude oil also experienced a similar drop, tumbling over 0.4% with a daily chart trend mirroring that of U.S. oil. The bearish engulfing pattern that formed after hitting a high note on Wednesday is indicative of the downward shift in oil prices.
The U.S. Energy Information Administration’s (EIA) release of inventory data on Wednesday revealed a massive 12 million barrel increase in U.S. crude oil inventories for the week ending February 9, contradicting the 2.6 million barrel increase expected by analysts. Gasoline and distillate inventories, on the other hand, saw a decline, while refinery throughput dropped to its lowest level since December 2022.
Meanwhile, in terms of supply prospects, Kazakhstan has committed to making up for January’s oil overproduction within the next four months, in line with OPEC+’s obligations. Similarly, Iraq has pledged to review its oil production and address any excess production above OPEC+’s voluntary production reduction commitments in the coming months.
Looking ahead, analysts at ANZ noted that OPEC’s March meeting is crucial, as the group will decide whether to extend supply curbs into the second quarter. Any indication that the production reduction agreement is unlikely to be extended may significantly impact the sentiment of the entire oil market.
As of 11:42 Beijing time, U.S. WTI crude oil futures reached $76.21 per barrel, down 0.44%, while Brent crude oil was at $81.23 per barrel, down 0.45%. The market remains highly sensitive to inventory and OPEC news, with moving averages continuing to suppress oil prices.